This is a very specific question for our business. We have to make a decision about it soon. Writing these lines will probably help us make a good decision.
How is our investment in Lego going?
Investing in Lego is not so easy, especially if you are too short-term. Buying Lego and selling it at a profit does not work immediately. You always have to leave an adequate margin of time that allows those sets to mature like a good video and increase in value.
In recent years we have made good decisions in this regard. We have invested significant amounts that now allow us to reap what we have sown. These days, surprisingly, we are selling more Lego than ever at this time. It is mainly whatsapp data because we have never tried it before, since Lego is typically reserved for the Christmas season.
We still have small “debts” from Lego, so to speak. I’m talking about Lego sets that were purchased years ago without considering the retirement date. We now operate differently. We buy in relevant quantities directly from Lego 1-3 months before Lego stops manufacturing them. Buying large volumes from a single supplier also simplifies management. I’m not going to lie to you.
How are our own brand products doing?
I was recently able to share that our own brand products are already contributing to 50% of profit. With the recent and massive shipment the 5 essential apps for the beach in summer of Lego sets and their subsequent sale this percentage will fall. It is clear that our own brand will be the future.
We already have some products that are selling very well. Expanding the catalogue to find more top sellers is something we have to pursue more strongly than we are doing at the moment. It is also clear that it is a risk. It is the risk of not getting it right and not having the turnover we need.
That is why at the moment the decision is complicated. Do we invest a larger part in Lego that is more or less safe or do we want to take a higher risk with own brand products? The answer could be this.
We will invest 50% in Lego
This will allow us to generate a secure profit and line data reduces the risk of not selling or even losing money. Another 40% will be used to replenish and/or create variations of products that already work very well. The remaining 10% will be for experiments. We should do a lot of these, distributing that capital among different options. This way we can test a wider range of products. We won’t make the same profit at Christmas, but we will be able to generate it throughout the rest of the year because thanks to 10 new products we have found 1-2 new ones.